U.K. Stocks Rise Before BOE’s Stimulus Decision
U.K. stocks gained as investors speculated Bank of England policy makers will announce a fresh round of asset purchases to revive Britain’s economy.
Aggreko Plc (AGK) surged the most in almost two years after raising 2012 dividend and forecasting an average double-digit revenue growth over the next five years. Standard Life Plc (SL/) climbed to a record after saying it will pay a special dividend. Aviva Plc (AV/) plunged the most in almost four years as the U.K.’s second-biggest life insurer cut second-half dividend.
The FTSE 100 Index (UKX) rose 14.14 points, or 0.2 percent, to 6,441.78 at 9:03 a.m. in London. The benchmark gauge has rallied 9.2 percent so far this year and jumped to a five-year high this week on optimism central banks around the world will continue with stimulus measures. The broader FTSE All-Share Index gained 0.2 percent today. Ireland’s ISEQ Index added 0.2 percent.
“It would appear that markets are expecting some form of monetary easing today from both the Bank of England and the European Central Bank, though any ECB measures are more likely to be implied rather than actual,” said Michael Hewson, a market analyst at CMC Markets Plc in London. “In the Bank of England’s case, the markets do appear to be gearing up for a resumption of the asset-purchase scheme.”
The volume of shares changing hands in companies on the FTSE 100 was 40 percent greater than the average of the past 30 days, data compiled by Bloomberg showed.
BOE officials may decide to increase asset purchases at a Monetary Policy Committee meeting in London today, according to 11 of the 39 economists surveyed by Bloomberg. The rest predict no change in the current target of 375 billion pounds ($562 billion). The lack of consensus reflects uncertainty prompted by last month’s split in the MPC, when Governor Mervyn King and two others lost the vote for a 25 billion-pound expansion.
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